Australia risks failing “the most important test of climate credibility this decade”, a leading think-tank has warned.

On Friday, Canberra published an “issues paper” on the country’s post-2020 target to reduce greenhouse gas emissions.

Given it is still considering the options, prime minister Tony Abbott’s government is set to miss the 31 March deadline for developed countries to submit their intended contribution to a global climate deal.

And the Climate Institute pointed out the government is basing its discussion on a scenario that will lead to 3.6C of warming.

That is the International Energy Agency’s “new policies” scenario, which assumes only existing climate policies are carried out, with no extra action in the next 25 years.

“A world of four degrees warming would be disastrous for Australia’s economy, security and environment,” said John Connor, CEO of the Climate Institute.

“Current global policies do have us on the path but, unlike in Australia, other major emitters are moving to increase not decrease credible climate action.”